GRAINS-Corn up for 3rd day on tight stocks; firm cash lifts soy

(Updates prices, adds new analyst quotes) CHICAGO, March 11 (Reuters) - Chicago Board of Trade (CBOT) corn futures rose for the third straight session on Monday on tight stocks and on follow-through from the rally that followed the bullish corn supply numbers released Friday by the U.S. government, traders said. "Corn is leading everything higher today and it's technical support after the USDA report. Managed money is buying after the aggressive fund liquidation that we've seen," said Shawn McCambridge, an analyst for Jefferies Bache. The U.S. Department of Agriculture's March supply/demand report on Friday kept projected corn stocks unchanged at a 17-year low. The market had expected higher inventories. "Corn was up from USDA's report Friday; that is being questioned by some, but it's all we have to work with for now," said Rich Nelson, director of research for Illinois-based analytical firm Allendale Inc. Wheat turned up on spillover buying from strong gains in corn futures. Soybean also rose for the third day in a row on firm cash soy, slow farmer selling and slow shipments from the 2013 South American harvest. Traders were beginning to shift some attention to the distant, or new-crop futures contracts, which were higher but lagged gains in the old-crop or nearby futures contracts. "The improving weather I think is limiting gains as well," Nelson said. Agricultural meteorologist John Dee of Global Weather Monitoring said additional drought-relieving rain fell over the weekend across a broad swath of the U.S. crop region.

The U.S. winter wheat crop is near its early growth stage and U.S. farmers soon will be planting the 2013 U.S. corn and soybeans. The U.S. crop belt is slowly emerging from the worst drought in more than 50 years, which trimmed production. At 11:45 a.m. CDT (1645 GMT), CBOT May corn was up 8 cents per bushel at $7.11-1/2, May soybeans rose 2-1/2 cents to $14.73-1/2 and CBOT wheat for May delivery was up 4-1/2 cents at $7.01-1/2. CBOT new-crop December corn rose 6-3/4 cents and new-crop November soybeans were down 1/4 cent at $12.68-1/4 per bushel. "Today, contrary to the weeks before, traders will pay more attention to corn than wheat," said Arnaud Saulais of Starsupply Commodity Brokers in Geneva. "The most surprising aspect of the USDA report was an increase in the forecast for the amount of U.S. corn that will be used for feed. The adjustment looked bullish as U.S. corn stocks remained unchanged against higher stocks estimated by analysts." In closely watched monthly supply/demand estimates on Friday, the USDA kept corn ending stocks steady at 632 million bushels, the smallest in 17 years and a bare three-week supply. Analysts polled by Reuters had expected it to increase its estimate for corn inventories 1.7 percent. The increase in forecasted use of U.S. corn in animal feed, which offset a cut in export demand, surprised operators who had anticipated low-priced wheat would take some feed demand away from corn. The USDA said the bump in corn feed demand came from a continued expansion in poultry production and a reduction in the projected feed and residual use of sorghum, another livestock feed. However, analysts said overall adjustments in the USDA's monthly report were not dramatic and that they would wait for the department's quarterly U.S. stocks report later this month for clearer supply/demand indications. "With this hurdle (the monthly USDA report) cleared, we expect higher old-crop corn prices in the weeks ahead as the market positions ahead of the March 28 Grain Stocks report," Morgan Stanley analysts said in a note.

Prices at 11:48 a.m. CST (1648 GMT)

LAST NET PCT YTD CHG CHG CHG CBOT corn 732.50 7.25 1.0% 13.3% CBOT soy 1512.00 3.50 0.2% 26.2% CBOT meal 436.40 0.30 0.1% 41.0% CBOT soyoil 50.50 0.34 0.7% -3.1% CBOT wheat 697.25 7.25 1.1% 6.8%EU wheat 236.50 2.50 1.1% 16.8%US crude 91.42 -0.53 -0.6% -7.5% Dow Jones 14,425 28 0.2% 18.1% Gold 1578.80 1.06 0.1% 1.0% Euro/dollar 1.3012 0.0007 0.1% 0.5% Dollar Index 82.7070 0.0110 0.0% 3.2% Baltic Freight 847 4 0.5% -51.3%

(Additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore; Editing by Bob Burgdorfer)